Loaded for Bear: Markets aren’t pricing in the F factor in the US — fascism

US stock markets hit new record highs last week, driven by an old-fashioned fundamental factor: the 17 September rate cut by the US Federal Reserve.

That rate cut came precisely one week after an event that will have a far bigger impact on markets in the long run.

The 10 September assassination of far-right political activist and influencer Charlie Kirk has triggered a reaction from US President Donald Trump’s Maga movement that threatens to undermine American liberty and values – and the economy.

Trump and the minions of Maga – a white, Christian nationalist movement baring its fascist fangs – have signalled openly that they plan to use Kirk’s murder as a pretext to crush the “radical left” and any dissent to remake America in their own image. Kirk’s Turning Point USA was a major force in getting younger voters to cast their ballots for Trump in 2024.

Free speech is already reeling in the wake of Kirk’s murder in Utah by Tyler Robinson, an apparently lone wolf gunman.

Last week, ABC pulled Jimmy Kimmel Live! off the air “indefinitely” after he made remarks suggesting that Robinson was linked to Maga – drawing a thinly veiled threat to ABC’s parent company Disney from Federal Communications Commission Chair and staunch Trump supporter Brendan Carr.

Disney then flip-flopped before deciding to bring the show back on Tuesday, 23 September. But its initial cave-in to pressure from the Trump administration remains worrying.

Earlier this year, The Late Show, hosted by Stephen Colbert, was cancelled by CBS after the network paid to settle a silly defamation lawsuit launched by Trump. Colbert and Kimmel are comedians who frequently mock Trump.

Kirk’s massive funeral in Arizona on Sunday was effectively a Nuremberg Maga rally, and the message was chilling.

“You have no idea the dragon you have awakened. You have no idea how determined we will be to save this civilisation. To save the West, to save this republic,” thundered Stephen Miller, the far-right White House Deputy Chief of Staff. “We are the storm.”

Arch-conservative podcaster Benny Johnson, quoting from Biblical scripture, said that: “Rulers wield the sword for the protection of good men and for the terror of evil men.”

That, folks, is the language and imagery of fascism.

Trump attacked the “Radical Left” at the memorial, which he held responsible for much of the violence besetting America – though all objective studies point to the right as the main source of political violence in America.

Trump has also just designated “Antifa” – a loose collection of left-wing groups opposed to fascism and racism – as a “major terrorist organisation”.

The plan is clear: Maga plans to deploy the state to crush opposition.

Days before Kirk’s memorial, Trump told reporters in the Oval Office that criticism of him was not “free speech” and was “illegal” – a terrifying statement for a US president to make.

The F-factor

Far bigger things than markets are at stake: the rights of American women – already under assault with abortion bans – immigrants, minorities, the LGBTQ community and anyone who does not fit the Maga profile.

But markets and the wider economy are also among the many areas poisoned by the rise of US fascism, and this will ultimately impact on all but the most affluent who stand to benefit from the Trump agenda and its massive transfer of wealth from the poor and middle class to the rich through the gutting of the social safety net and tax cuts for top income earners.

I have noted in this column before that the rise of White Christian Nationalism and other brands of religious extremism worldwide are major geopolitical and investment risks.

Read more: After the Bell – Apocalypse now, Trump 2.0, surging religious extremism and the geopolitical and investment risks 

Eight months into the second Trump administration, some of the market risks linked to the F-factor are becoming clear:

• The curtailment of criticism and the targeting of the “far left” – which means anyone critical of Trump – could spark waves of social unrest which will spook markets and be used as a pretext for more crackdowns. The use of state resources on this front will require massive sums of money with consequences for America’s soaring debt levels and credit ratings. Rising inequality will further inflame discord.
• Trump’s gerrymandering moves in states such as Texas and the rollback of Civil Rights legislation ahead of the 2026 mid-term elections point to a sinister new era in US politics that mirrors Russia and Zimbabwe – rigged elections. Trump’s Big Lie that the 2020 election was stolen led him to incite the mob that attacked the US Capitol on 6 January 2021. The Republican Party will not yield power – which Maga sees as “God-given” – a political development that markets need to assess.
• Trump’s firing in August of Erika McEntarfer, commissioner of the Bureau of Labor Statistics (BLS), on the grounds that she was “rigging” jobs data to make him look bad, is ominous. Dear Leader only wants happy economic data! If the independence of such statistical agencies is undermined, then routine data from the world’s largest economy that moves markets on a regular basis will be suspect. If Malawi’s inflation numbers are fudged, that’s one thing. But if it happens in the US, trillions of dollars in trading worldwide on the forex, bonds, equities and commodities markets will be made on ginned-up data. And Trump has also been attacking the independence of the US Federal Reserve.
• Maga’s war on science could eventually cripple American know-how in an area where it has been a leader. The war on climate science will undermine America’s ability to grapple with the mounting natural disasters sparked by our burning planet. And the rollback on vaccine mandates and the like will make measles great again and leave America vulnerable to a future pandemic.

This is just the tip of the looming iceberg. And also keep this in mind: Recently, the Pentagon issued a statement clarifying that Defence – now Department of War – Secretary Pete Hegseth supported the right of women to vote!

This was after Hegseth reposted a video of a CNN interview with Douglas Wilson, a far-right Christian nationalist pastor, who believes the 19th Amendment – which granted the franchise to women – should be repealed.

Hegseth is affiliated with the Communion of Reformed Evangelical Churches, and its co-founder is Doug Wilson. The views of this church are straight out of Margaret Atwood’s The Handmaid’s Tale, the dystopian classic that portrays America after a violent Christian Right takeover, where women literally have no rights, including the right to paid work outside of the home – or even to read.

What would it mean for America’s economy if half of the population were removed from the labour force and forced into illiteracy?

That sounds crazy. But many of Trump’s actions and statements – and those of his supporters – in recent months would have also been dismissed a few years ago as something out of dystopian fiction.

The focus of market commentators has been on Trump’s hamfisted tariffs – remember the penguins! – complaints about the Fed not cutting rates fast enough, and on debt levels.

That all misses the bigger picture. How do you price in the world’s largest economy and a vibrant, if flawed, democracy becoming a Banana Fascist Republic? I don’t know, but hey, price/earnings ratios and trade deficits only go so far. DM